Federal Board of Revenue (FBR) Chairman Shabbar Zaidi Tuesday said that Pakistan has decided to go for the e-governance system on an urgent basis under the policy decision of making National Single Window project operational for importers/exporters by 2021. The NSW to be completed at a cost of $163 million will eliminate need for physical interaction between traders and regulators, besides simplifying the procedures and improving predictability.
Shabbar Zaidi along with his team updated a gathering of representatives from media and development partners here on Tuesday on the progress being made on trade facilitation particularly on one of government”s key reform programmes – the implementation of trade related National Single Window.
The FBR is developing software for provision of connecting 48 ministries, divisions and regulators for clearance of goods at entry and exit points. This new system will be in place by 2021. The biggest challenge for the FBR”s Customs department is to convince 48 ministries/divisions and regulators to re-engineer their process and convince them to share this new system.
The chairman FBR stated that NSW and other automation related initiatives by Customs are the manifestation of the government”s commitment to reform and modernisation. He also emphasised that with continued support from the government and the development partners, particularly the USAID, ADB, the World Bank Group, and UK”s Department for International Development, the FBR is confident of meeting its reform objectives.
He said, “Keeping in view the circumstances of Pakistan, we have to be quicker in implementing systems particularly customs clearance processes. The general perception of the investors (which is not true) is that lots of problems arise from documentation and paperwork in the country. There are certain notions, which have been created or perceived due to these systems.”
The FBR”s Customs launched WeBOC-Global in Karachi last week. All customs processes like GD filing could be done from home with least interaction with the customs people, he said.
The World Bank Country Director Patchamuthu Illangovan has said that the project would help in facilitating trade. He suggested that it will be good if the FBR considers outsourcing the project. The suggestion came from him on the ground that he did not want to see the state-owned entity running the NSW project.
Over the years, the single window has become a core instrument to facilitate trade, simplify procedures and implement electronic business. Around 50 countries have implemented the NSW system. Responding to this, the FBR chairman stated that the track record of state-owned entities was not good in Pakistan but the major problem for the FBR was finding out capable workforce to work into public sector. “We will put in place hybrid system to come up with good solutions on NSW,” he added.
Project Director NSW, Imran Mohmand informed that Pakistan Customs is the lead agency for NSW implementation under the supervision of a high-level steering committee currently chaired by the adviser on finance, revenue and economic affairs. The NSW is a quantum jump from the current silo and paper-based management of Pakistan”s external trade involving 44 different government departments responsible to regulate different aspects of imports, exports and transit trade. The current system being inefficient and opaque creates complications for traders and economic operators leading to increased costs and delays as well as lax government”s controls in carrying out cross border trade. As per World Bank”s report on ease of doing business, the business community in Pakistan incurred more than $400 million extra cost as compared to the average cost for imports and exports in South Asia region, during the last one year. As a result competitiveness of Pakistan to facilitate trade, attract investment, get integrated into global value chains and be a regional hub for trade and transit is seriously undermined.
The good news is that as the leading agency for NSW implementation, Pakistan Customs has not only made substantial progress on NSW implementation but is also successfully improving cross border trade facilitation.
Talking to the gathering, Dr Jawwad Uwais Agha, Member Customs Operations said Pakistan”s global ranking under cross border trade related indicator of World Bank”s ease of doing business Survey for 2019 has improved by 29 positions due to efforts of Pakistan Customs. He informed that the indigenously developed Customs Single Window has already been implemented in the shape of WeBOC, which handles 90% of Pakistan”s external trade providing 24/7 paperless processing services. The upgraded version as WeBOC-Glo is presently being rolled out. He informed that Customs collects 48% of FBR”s total revenue; however, its role is undergoing a paradigm shift from a mere revenue collection and enforcement agency towards the lead facilitator of cross border trade. Being responsible for implementation of numerous measures under WTO”s Trade Facilitation Agreement, Pakistan Customs is leading the public sector in automation. Under its INTRA initiative, Customs successfully partnered with 14 government departments and ministries in linking them with WeBOC-Glo improving controls and efficiency. The introduction of electronic I, E forms, E-payment in collaboration with SBP for trade as well as the Currency Declaration System and Advance Passenger Information System for airports by Customs has improved compliance with FATF related requirements. He emphasized that NSW is a very complex undertaking and would require continued political support as well as cooperation from concerned government departments and development partners to succeed.
The Project Director made a detailed presentation informing that with technical assistance from development partners specifically the USAID, the IFC and the ADB Customs has achieved important milestones in the NSW project in a short period of one and a half year. The business model for execution and operations as well as alignment of participating departments has been approved by the Steering Committee in April, 2019. The draft legislation for NSW has been prepared while the functional, revenue and technical models are expected to be finalized by June, 2019. Though government has allocate funds in the upcoming PSDP, however, Customs is currently providing funds from its GD service fee to fast track the NSW implementation. If current pace continues the new system is expected to become operational much earlier than the deadline of 2022. The program is also expected to be completed below its initial cost estimation of $ 163 million by relying on indigenous resources. Once fully implemented, the NSW will eliminate the need for physical engagement between the traders and regulators besides simplifying the procedures and improving predictability. It will facilitate electronic submission, risk based parallel processing and issuance of regulatory approvals relying on data/process harmonization while using modern technology. The port community system will help transform the logistics side of external trade. In addition to B2G interactions, the NSW will strengthen and reinforce B2B, and G2G relationship.